This paper presents evolutionary models for very-low-mass stars and brown dwarfs with temperatures below 2800 K, incorporating dust formation and opacity. The models are based on synthetic spectra and non-grey atmosphere models. The interior of the most massive brown dwarfs develops a conductive core after about 2 billion years, which slows down their cooling. The models are compared with observations of late-M and L-dwarfs in optical and infrared color-magnitude diagrams (CMDs). The onset of dust formation in the atmosphere explains the very red near-infrared colors of these objects. The comparison with the faintest observed L-dwarfs suggests that dynamical processes such as turbulent diffusion and gravitational settling occur near the photosphere. As the effective temperature decreases below 1300-1400 K, the colors of these objects move to very blue near-infrared colors due to ongoing methane absorption. The authors suggest that there may be a brown dwarf dearth in $J$, $H$, and $K$ CMDs around this temperature range. The models successfully explain the IR colors of late M- and L-dwarfs and their blue loop in the optical, although improvements are needed for accurate quantitative agreement with observations. The paper discusses the limitations of the current theory, including the need for more accurate molecular opacities and the optical spectrum of Gl229B, which remains to be described accurately. The authors emphasize that substellar objects must be searched in the near-infrared, as brown dwarfs around 1500 K radiate more than 90% of their energy at wavelengths longward of 1 μm.This paper presents evolutionary models for very-low-mass stars and brown dwarfs with temperatures below 2800 K, incorporating dust formation and opacity. The models are based on synthetic spectra and non-grey atmosphere models. The interior of the most massive brown dwarfs develops a conductive core after about 2 billion years, which slows down their cooling. The models are compared with observations of late-M and L-dwarfs in optical and infrared color-magnitude diagrams (CMDs). The onset of dust formation in the atmosphere explains the very red near-infrared colors of these objects. The comparison with the faintest observed L-dwarfs suggests that dynamical processes such as turbulent diffusion and gravitational settling occur near the photosphere. As the effective temperature decreases below 1300-1400 K, the colors of these objects move to very blue near-infrared colors due to ongoing methane absorption. The authors suggest that there may be a brown dwarf dearth in $J$, $H$, and $K$ CMDs around this temperature range. The models successfully explain the IR colors of late M- and L-dwarfs and their blue loop in the optical, although improvements are needed for accurate quantitative agreement with observations. The paper discusses the limitations of the current theory, including the need for more accurate molecular opacities and the optical spectrum of Gl229B, which remains to be described accurately. The authors emphasize that substellar objects must be searched in the near-infrared, as brown dwarfs around 1500 K radiate more than 90% of their energy at wavelengths longward of 1 μm.